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On Endogenously Staggered Prices Author info | Abstract | Publisher info | Download info | Related research | Statistics V. Bhaskar (Department of Economics, University of Essex, Colchester CO4 3SQ, UK)
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064Taylor's model of staggered contracts is an influential explanation for nominal inertia and the persistent real effects of nominal shocks. However, in standard imperfect competition models, if agents are allowed to choose the timing of pricing decisions, they will typically choose to synchronize. This paper provides a simple model of imperfect competition which produces stable staggering. Our argument relies on strategic interaction at two levels --- between firms within an industries, and across industries --- and produces a continuum of stable staggered price equilibria.
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Paper provided by EconWPA in its series Macroeconomics with number
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Date of creation: 15 Sep 1998Date of revision:
Handle: RePEc:wpa:wuwpma:9809007Note: Type of Document - Tex; prepared on IBM PC ; to print on any;Contact details of provider: Web page: http://129.3.20.41
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Keywords: Staggered contracts ; monopolistic competition ; coordination failures ; Other versions of this item:
Find related papers by JEL classification: E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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